Business Strategy of Apple Inc.: A Comprehensive Analysis

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Business strategy

Contents
Introduction................................................................................................................................1
LO1............................................................................................................................................1
P1 Apply appropriate frameworks to analyse the macro environment for a given
organisation............................................................................................................................1
M1: Critically analyse the macro environment to determine and inform strategic
management decisions...........................................................................................................3
LO2............................................................................................................................................4
P2 Using appropriate frameworks analyse the internal environment and capabilities of a
given organisation..................................................................................................................4
M2 Critically analyse the internal environment to asses the strengths and weaknesses of an
organization's internal capabilities structure and skill set......................................................5
LO3............................................................................................................................................6
P3 Apply Porter’s five forces model and to evaluate the competitive forces of a given
market sector for an organization...........................................................................................6
M3: Devise appropriate strategies to improve competitive edge and market position based
on the outcomes......................................................................................................................7
LO4............................................................................................................................................8
P4 Apply a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation..........................................................................................................8
M4: Produce a strategic management plan that has tangible and tactical strategic priorities
and objectives.........................................................................................................................9
D1: Critique and interpret information and data, applying environmental and competitive
analysis to produce a set of valid strategic directions objectives and tactical actions.............10
Conclusion................................................................................................................................10
References................................................................................................................................11

Introduction
Business strategy is all about building plans for the business so as to conduct the operations
of the firm smoothly. Further, it has been found that the level of competition is increasing at a
faster pace in the modern era and due to this reason effective business strategy is a must.
Along with this, different models are present that are adopted for internal and external
analysis such as SWOT, Pestle etc. and with the assistance of this it can be known about the
factors through which organizational performance is influenced (Scholes, 2015). Pestle as
one of the framework is adopted for external analysis and it reflects the different factors such
as political, social, legal, environmental etc. that affects the business performance in the
market. Moreover, for internal analysis the best framework is SWOT that indicates the key
strengths and weaknesses of the firm. The present analysis undertaken is based on the firm
selected Apple that operates in the consumer electronics sector. The company designs
consumer software, electronics etc. The study highlights the business strategy of Apple. The
key tasks covered involve internal capability of the organization, porter five force models,
and strategies to improve competitive edge etc.
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LO1
P1 Apply appropriate frameworks to analyse the macro environment for a given organisation
The macro environment is composed of numerous factors and at the same time different
challenges are present that influences the overall position of the entity. The vision of the firm
is to focus on innovative practices and offering a wide range of products to the consumers as
per their expectations. The mission of the organization is to deliver the best customer
experience through its innovative services and hardware (Notesmatic, 2015). The key
objectives that are part of the firm involve enhancing customer base, market share,
profitability level, and worldwide presence. Corrective actions have been mainly taken in
order to work for the accomplishment of these objectives and at the same time it brings
fruitful results for the firm also.
Source: Fourweek MBA, 2017
For analysing the macro environment of Apple Inc. Pestle analysis has been undertaken that
mainly highlights the key factors that are affecting business operations. The applicability of
PESTLE analysis has been shown below:
 Political: Apple Inc. is considered to be one of the wells know American
technological firm and at the same time the company is earning a high amount of
revenue. This is directly leading to higher corporate tax in the United States. Along
with this, the dependency of the firm is on China where the presence of political
unrest in China can adversely affect the firm. Further, it is also possible that Apple
Inc. can become the target of anti-Americanism and this can have an adverse impact
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on its market share also (Akter, et al. 2016). So, in this way political factor is affecting
business performance.
 Economical: The level of labour cost is increasing at a faster pace in China and this
can influence of cost advantage is the case of some Apple products. Further, the
presence of middle-class income people in the United States can directly affect the
potential market in the case of Apple. Along with this, the strong US dollar can
directly increase the exchange rate and in turn it will be difficult for Apple to conduct
operations in the market of the US.
 Social: This factor is linked with customer preferences and trends in the market.
Consumers in the market especially the youngsters are easily attracted towards Apple
products such as Macbook, iPhone series etc. (Thompson, et. al., 2015). Some ethical
concern is also present with respect to Apple products manufacturing in China
especially in the case of socially conscious consumers. Sale of Apple is high in every
market like the US.
Source: Fourweek MBA, 2017
 Technological: The company like Apple Inc. operates with the advanced platforms
for conducting its overall operations. Moreover, the development of Apple TV and
other advanced products represents its effective technological platforms.
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 Legal: Complying with the employment laws, payment of taxes, duties etc. are most
crucial for Apple Inc. and the company focuses on meeting with the expectations of
government. The entrance of firm into financial service market has increased the level
of regulations (Olson, et. al., 2018).
 Environmental: Apple Inc. has a responsibility towards the environment and in this
regard the company has taken different initiatives such as recycling of the electronic
devices and with these environmental issues have been tackled.

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M1: Critically analyse the macro environment to determine and inform strategic management
decisions.
As per the view of Higgins, et. al. (2015), different challenges along is present in the macro
environment that the company needs to consider for conducting the key operations smoothly.
Further, it has been found that the political factor has a direct influence on the operational
practice of the firm where government stability and presence of another type of factor affects
the operations of the organization. Considering the macro environment every decision has to
be taken keeping in view the influence of every factor and through this business practices are
carried out in a proper manner (Higgins, et al. 2015). According to Hsieh, et al. (2019) within
the macro environment economic factor is also very important as it represents the economic
condition of the nation.
In the case of a well-established firm like Apple Inc. the economic condition of the US is
highly sound and in this case it allows individuals to purchase the services even at a high cost
also. Further, it has been identified that for dealing with the complexities in the macro
environment it is necessary for any specific firm to focus on the development of effective
strategies so that it can provide them proper base (Hsieh, et al. 2019). Each and every factor
in the macro environment influences the strategic decision and along with this the
management of Apple Inc. has to take a decision keeping in view the different factors
whether it may be legal, political, environmental or any other. Moreover, when any particular
factor is not in favour of the firm then in such case better strategic plans and actions are
developed for the overall growth and progress of the firm in the market. As per the view of
Zhong and Li (2018) the macro environment is composed of various factors and with the
proper management of the key factors business functions can be carried out in a positive
manner and at the same time it supports organization in gaining a competitive edge over the
rivalry.
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LO2
P2 Using appropriate frameworks analyse the internal environment and capabilities of a given
organisation
The internal environment analysis clearly represents the real ability of the firm to carry out its
key operations. Further, one of the key frameworks is VRIO that helps a lot in knowing the
real strength of the organization. The description of the framework has been shown below:
 Valuable: Different resources are valuable in case of Apple Inc. through which it
becomes easy to carry out the business operations. The key resources are human,
financial and technological. In terms of human all the employees are highly skilled
and knowledgeable through which they are able to conduct the assigned tasks in a
proper manner. Further, the proper managerial expertise present also provides benefits
to the firm where better knowledge is applied for serving the customers in the market
(Leonidou, et. al., 2015). Moreover, technology is another main key resource where
this resource is utilized for the development of products and this also builds a
competitive position of Apple. In short, within the consumer electronics sector it is
very difficult to operate with the advanced technology platform and it can lead to a
decline in the performance of the business also. Lastly, the financial resource is also
major where proper funds are present with the selected company for carrying out its
crucial operations. In the case when right financial resources are not present then it
can lead to a decline in the performance of the business. Hence, these are the key
valuable resources in case of Apple Inc. that provides proper assistance to the firm.
 Rare: This factor highlights the range of key resources that cannot be utilized by the
other firms that provide direct benefit to Apple Inc. (Buckley, et al. 2016). The
resource such as skilled workforce, strong financial position and technological know-
how is very valuable for the firm. Proper practices have been undertaken for
managing all the valuable resources. Generally other brands in the market that are
operating in the consumer electronics sector are unable to utilize such resources such
as strong financial position etc. and in this case it is a kind of advantage for the
selected firm.
 Inimitable: The ranges of resources identified are not at all inimitable. Further, the
key rivals of Apple Inc. cannot utilize such resources that can be technological,
human, financial etc. in the market.
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 Organized: Apple believes in organizing all the resources in a proper manner.
Further, proper planning is done well in advance so that resource management takes
place in a better manner (Yuliansyah, et al. 2016).
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M2 Critically analyse the internal environment to asses the strengths and weaknesses of an
organization's internal capabilities structure and skill set.
In the case of the well-established consumer electronic brand like Apple Inc. it has been
found that the firm is internally strong and this has supported a lot in conducting the overall
operations smoothly. The applicability of the VRIO framework has clearly shown that the
key strength of the firm is its key resources on the basis of which operations are carried out.
The resources such as advanced technology, human and financial help a lot to focus on the
development of superior consumer electronic products (Chang, 2016). Generally, Apple Inc.
is known in the market for its latest trends and advanced features products and this is
representing that the internal environment of Apple is quite positive and this has supported a
lot in the business success also. Internally Apple Inc. is highly capable of utilizing the
different resources such as technological, human or any other. Further, time to time new
technological platforms are built through innovation and creativity and this directly provides
real strength to Apple Inc. in the market where it mainly conducts its business operations. As
per view of Wheelen, et. al. (2017), when the internal environment of the firm is not at all
positive and no such strengths of the business are present then in such case it acts as hurdle
in front of the business and along with this operational activities are not at all carried out. The
company like Apple Inc. has managed a lot to develop its internal strength and the main
reason behind the same is innovation and creativity where the entire individual within the
workplace apply new methods and practices. On the other hand, some weaknesses in relation
to the internal abilities of the firm are present. One of the key weaknesses is lack of resource
management practice where right measures are not taken for managing the resource and this
sometimes leads to a decline in the business performance in the market. According to Hart,
et. al. (2016), sometimes the weaknesses in the internal ability of the firm sometime act as a
hurdle and for managing all the weaknesses proper strategies are needed that can provide
long term benefits to the firm.
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LO3
P3 Apply Porter’s five forces model and to evaluate the competitive forces of a given market
sector for an organization
Porter five force as one of the tool is considered to be highly effective in terms of knowing
the different factors that affect the operations of the firm. The key factors are bargaining
power of buyer, supplier, the threat of substitutes etc. and all these factors have a direct
influence on the business practice (Boyd, et al. 2017). The applicability of porter five forces
on Apple Inc. has been shown below:
 Bargaining power of buyer (Moderate): There is no doubt that the consumer
electronics market is highly competitive and in this case buyers have different options
present where they can easily purchase the products as per their requirement. In the
case of Apple Inc. the company offers product that is highly standardized and of high
quality also (Shuen, 2018). So, in this case bargaining power of buyer is moderate
where they have no such alternatives present. No other brand is offering highly
innovative and advanced products in the market in comparison with Apple Inc.
 Bargaining power of supplier (Low): Different suppliers are present in the market
that are offering different raw materials used in the production of consumer electronic
products. Apple Inc. purchases different materials from the suppliers in the market
such as linked with manufacturing of mobile phone, tablets etc. and in this case
different suppliers are present in the market that can provide products to the firm.
Hence, in this case their bargaining power is low.
 The threat of substitute (Moderate): It is moderate in case of Apple Inc., it is a
well-known fact that highly standardized products are offered to the customers and
the company is highly innovative also (Linder and Williander, 2017). Making a
substitute for Apple products is not at all an easy task. Other consumer electronics
companies have not adopted such advanced technology and systems in their
operations. Therefore, this provides additional benefit to Apple Inc. in the market.
 Competitive rivalry (High): The Company like Apple Inc. is operating in a market
which is highly competitive and due to the presence of other players in the market the
company has to face a large amount of challenges. The key competitors are Samsung,
Nokia, Sony mobile etc. The firm has to deal with the different players in the market.
Hence, in this way the level of competition is high in the consumer electronics
market.
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 The threat of new entrants (Low): In order to conduct operations in the consumer
electronics sector large investment is required (Buckley and Ghauri, 2015). For any
new entrant it is not at an easy task to easily conduct all the operations as a high
amount of skills and expertise is needed. Therefore, the threat of new entrants is low
in this case.
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